'Strong action' is coming if the EU doesn't like Apple's App Store concessions

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A European Commissioner has laid down the law, and has declared that Apple will be the target of "strong action" if its compliance with the Digital Markets Act isn't enough.

The EU Digital Markets Act will come into effect in March, and Apple has advised of the changes it will make to comply. While those plans have gathered complaints, the EU itself has warned that Apple faces the prospect of penalties if it fails to do enough to comply with the new rules.

The European Commissioner for Internal Market Thierry Breton told Reuters "The DMA will open the gates of the internet to competition so that digital markets are fair and open. Change is already happening."

Regulators will assess proposals with feedback from third parties starting from March 7, Breton continued. "If the proposed solutions are not good enough, we will not hesitate to take strong action."

Bretton's comments are a warning to Apple and others that there is the possibility of penalties if their proposals don't do enough to meet the terms of DMA. However they do not directly comment on what has been announced.

A spokesperson for the European Commission was similarly careful with their wording, acknowledging Apple's announcements ahead of the March 7 compliance deadline, but declined to comment about them. "We strongly encourage designated gatekeepers to test their proposals with third parties," they added.

Apple's Plans and complaints

On January 25, Apple revealed its changes that will come into effect from March 2024 to comply with DMA. For all users, Apple will start to notarize all iOS apps, regardless of where they're sold.

Developers will be able to offer their own app marketplace in the EU, but they must be approved by Apple and use a human review process, Those stores are also responsible for their own refunds, but they can use alternative third-party payment processors.

At the same time, Apple is changing its fee structure, reducing the standard commission of 30% down to 17%. For apps that stay within the App Store, there will also be a 3% fee for using Apple's payment processing services.

Controversially, all apps not sold via the App Store will be subject to a Core Technology Fee of 0.50 Euro per first-install of an app annually, waived for the first million installs.

Apple's proposals have, naturally, attracted complaints. Spotify CEO Daniel Ek called the fees "extortion, plain and simple," while Epic Games CEO Tim Sweeney referred to it as "hot garbage" and a "devious new instance of malicious compliance."

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54 Comments

pwrmac

said about 2 months ago

For the complainers it is all about money.. get a free ride. I do not think the EU can force a commercial company to use tarrifs for their services. Maybe a price cap but that's it.

rax_mark

said about 2 months ago

The EU, unlike the US, believes in the spirit of the law, instead of the word of the law, Apple should have realised that.

Apple cannot win this one by using legal loopholes. I suspect if this continues we may see one of two possibilities:-

I) Apple exits the EU.

II) The EU bans Apple within its borders.

I suspect Apple doesn't want to give up the European market to Samsung and Google, so the first one is highly dependent on whether Apple can still get a profit with side loading existing.

Also, it is possible that other countries implement a DMA equivalent law (Japan is already in the process of doing so) so exiting markets will be shooting themselves in the foot.

One thing is sure, the next decade will be different for Apple than the previous one.

red oak

said about 2 months ago

rax_mark said:

The EU, unlike the US, believes in the spirit of the law, instead of the word of the law, Apple should have realised that.

Apple cannot win this one by using legal loopholes. I suspect if this continues we may see one of two possibilities:-

I) Apple exits the EU.
II) The EU bans Apple within its borders.

I suspect Apple doesn't want to give up the European market to Samsung and Google, so the first one is highly dependent on whether Apple can still get a profit with side loading existing.

Also, it is possible that other countries implement a DMA equivalent law (Japan is already in the process of doing so) so exiting markets will be shooting themselves in the foot.

One thing is sure, the next decade will be different for Apple than the previous one.

Spoken like a true socialist

Apple opened up the browser, NFC, and allows game streaming apps. And, allows distributions of apps outside of the App Store - do you think Apple should get zero compensation for that?

Laws are written. Apple followed every letter of the law

sirdir

said about 2 months ago

red oak said:

rax_mark said:

The EU, unlike the US, believes in the spirit of the law, instead of the word of the law, Apple should have realised that.

Apple cannot win this one by using legal loopholes. I suspect if this continues we may see one of two possibilities:-

I) Apple exits the EU.
II) The EU bans Apple within its borders.

I suspect Apple doesn't want to give up the European market to Samsung and Google, so the first one is highly dependent on whether Apple can still get a profit with side loading existing.

Also, it is possible that other countries implement a DMA equivalent law (Japan is already in the process of doing so) so exiting markets will be shooting themselves in the foot.

One thing is sure, the next decade will be different for Apple than the previous one.

Spoken like a true socialist

Apple opened up the browser, NFC, and allows game streaming apps. And, allows distributions of apps outside of the App Store - do you think Apple should get zero compensation for that?

Laws are written. Apple followed every letter of the law

They should get as much say in what is installed and paid as much as Microsoft gets paid when I install a Program outside the store on my PC or as much as Apple gets paid when I install a mac App outside the App Store. Free our devices from the tyranny of Apple (only mildly exaggerating)

avon b7

said about 2 months ago

red oak said:

rax_mark said:

The EU, unlike the US, believes in the spirit of the law, instead of the word of the law, Apple should have realised that.

Apple cannot win this one by using legal loopholes. I suspect if this continues we may see one of two possibilities:-

I) Apple exits the EU.
II) The EU bans Apple within its borders.

I suspect Apple doesn't want to give up the European market to Samsung and Google, so the first one is highly dependent on whether Apple can still get a profit with side loading existing.

Also, it is possible that other countries implement a DMA equivalent law (Japan is already in the process of doing so) so exiting markets will be shooting themselves in the foot.

One thing is sure, the next decade will be different for Apple than the previous one.

Spoken like a true socialist

Apple opened up the browser, NFC, and allows game streaming apps. And, allows distributions of apps outside of the App Store - do you think Apple should get zero compensation for that?

Laws are written. Apple followed every letter of the law

They only did that under pressure from the likes of the EU.

NFC should never have been restricted in the first place. How has everyone else managed to open it up without issue?

The main reason Apple has restricted competition is for its own gain, and while you may disagree, the spirit of the law is something that should be clear to anyone, and Apple clearly isn't playing along in that regard. Apple will surrender the minimum possible until it complies. That is perhaps the nature of the game and understandable to a point but consumers are being harmed and Apple is very aware of public opinion. If that sways, it will not be good.

If this gets escalated to the EU's higher courts, it is very likely that Apple will come out worse for wear. Just ask the banks.